Pound to euro exchange rates have been higher in recent weeks, following the 12-year lows of interbank rate of 1.0533 reached on the 19th March. Since then, market optimism over the global response to the crisis, and some worrying news concerning the Eurozone outlook has all contributed to a big improvement.
The rise for sterling can also be attributed to the strong economic response to the crisis with the UK taking on some unique policy actions including paying the wages of ‘furloughed’ workers and also seeking to provide billions in loans to businesses.
Record Low PMI’s Cause GBPEUR Exchange Rate Movement
Looking forward, the outlook for the global economy might become more important as this has been a key factor for sterling rates recently. An example was last week where whilst the Eurozone posted some record low data on the PMI (Purchasing Managers Index) data, the pound to euro rate didn’t really move much higher. It can be said this is because what is bad for the Eurozone is also bad for the UK, the UK needs a healthy trading partner to help support its own badly needed recovery ahead.
This week is a key week for GBPEUR exchange rates, the pound to euro level could be in for some increased volatility as the European Central Bank meet Thursday to discuss their latest interest rate decision.
Will GBPEUR Go Above 1.15 Again?
Thursday is the latest European Central Bank interest rate decision and whilst no changes in policy are expected, markets will be paying close attention to the commentary around future behaviour by the Eurozone’s central bank.
Ursula Von Der Leyen, President of the European Commission, last week apologised for the slow response with Italy. There is a growing concern that inaction now could spell greater economic and political concerns ahead for the Euro, GBPEUR levels might well themselves rising if the Euro finds itself in the spotlight again.
Having said that, more positive news this week concerning the easing of restrictions in Italy, France and Spain has so far tempered any euro weakness against the pound. GBPEUR levels are currently 1.1465, please do get in touch if you would like to discuss more about the latest news and movements ahead for this pairing.
If you have a transfer to buy or sell pounds or US dollars and wish to better understand future events that might change exchanges rates, please do get in touch directly with me to discuss further.